CMS Approves Hospital Medicaid Waiver

The Centers for Medicare & Medicaid Services (CMS) approved a waiver that the state Health and Human Services Commission (HHSC) says  allows Texas "to expand Medicaid managed care while preserving hospital funding, provides incentive payments for health care improvements, and directs more funding to hospitals that serve large numbers of uninsured patients." The waiver means Texas will continue receiving federal funds while expanding Medicaid managed care.

Texas Health and Human Services Executive Commissioner Tom Suehs said the waiver "will allow us to replace an archaic federal [hospital] Medicaid funding system with one built around local solutions that rewards hospitals for patient care and innovation. These reforms will allow us to ensure the best, most efficient use of Medicaid funding and improve services for Texans."

An HHSC news release said Gov. Rick Perry and the legislature directed HHSC to apply for the waiver "to identify innovative, state-based solutions to Texas' health care needs. Under the waiver, communities and hospitals will form regional health partnerships that support more localized health care solutions. The partnerships will identify ways to improve health services that address the specific needs of their region in order to qualify for incentive payments. These projects will be monitored and measured to ensure the funding is used efficiently and effectively."

Projects that might be funded under the waiver include initiatives to expand availability of primary and specialty physician services, implement the medical home model, reduce inappropriate use of emergency centers, and improve care for diabetics.

HHSC has said it expects hospital districts to work with county medical societies to develop regional plans. In October, TMA President C. Bruce Malone, MD, and John Holcomb, MD, chair of TMA's Select Committee on Medicaid, CHIP, and the Uninsured, wrote HHSC officials to urge them to involve physicians in the process. They said the success of the regional partnerships "will depend on collaboration and cooperation with local physicians and other stakeholders."

The state's Medicaid managed care program pays health plans a monthly fee to cover treatment of patients on Medicaid. Federal rules generally mean that states that expand managed care see a reduction in funding to hospitals under the Medicaid Upper Payment Limit program. Without the waiver, safety net hospitals in the state would have lost about $3 billion a year in supplemental funding.

HHSC says hospitals with uninsured patients "will continue to receive funding to care for them, as well as physician, clinic, and other services, and traditional inpatient costs. The waiver does not change who is eligible to get Medicaid or the services they can receive."

Family Planning Feud
CMS did not approve the state's Women's Health Waiver request, thus Texas cannot prohibit Medicaid recipients from receiving care at family planning clinics that perform abortions. The government said federal law does not permit such a restriction.

That prompted Governor Perry to say, "The Obama Administration is playing politics by holding women's health care hostage because of Texas' pro-life policies, sacrificing the health of millions of Texas women in the name of their pro-abortion agenda."

Other Services Expanded
Medicaid also announced:

  • Tobacco cessation counseling will become a Medicaid benefit for pregnant women between ages 10 and 55 on Jan. 1.
  • Starting March 1, physicians will have the option to submit electronic claims to the Texas Medicaid & Healthcare Partnership for services to Medicaid clients whose benefits are administered by a Medicaid managed care organization. This means physicians will be able to submit all their Medicaid claims – fee-for-service and HMO claims – to a single entity rather than to multiple ones. TMA lobbied for the change during the legislative session as a way to reduce the administrative complexity and cost of the Medicaid program.

Action, Dec. 16, 2011